Yesterday I noticed my not very verbal 3 yos whole penis was red and a tiny bit swollen.
He indicated to me that he had stuck it in the hole of a toy lol
It seemed to be sore and he would barely let me put cream on.

A couple of hours later he wandered over to me with what I thought was cream on the tip of his foreskin. I looked closer and it was like liquidy cottage cheese. I gently wiped it and more popped out like squeezing a big whitehead. There is not much odor to it.
Probably about a dime sized amount in total came out.
Today his whole penis is still red and he is having quite a bit of discomfort. A small amount of discharge was present when I looked.

Should I be taking him in or should I just be waiting and seeing if it gets better?

I would reccomend taking him to see a doctor. Since you live in Canada you will likely not see the ignorance among physicians that is so prevelant in the U.S.

There are many possibilities as to what this could be. It could be a bacterial infection of some kind which could arise from an injury he might have received from putting it in a toy and this may be the most likely cause. It would be best to take him to see a physician as they will be better able to determine what is going on and how best to treat it. Leaving it alone without taking him to a doctor could allow any infection to spread so it would be best to have a physician examine him.

My guess is that he might have manipulated his penis in such a way that an accumulation of smegma was released. This would be perfectly normal. Smegma does not have an odour and is beneficial. If he had an infection going on then the discharge would be more like pus and smell.

Yesterday I noticed my not very verbal 3 yos whole penis was red and a tiny bit swollen.
He indicated to me that he had stuck it in the hole of a toy lol
It seemed to be sore and he would barely let me put cream on.

A couple of hours later he wandered over to me with what I thought was cream on the tip of his foreskin. I looked closer and it was like liquidy cottage cheese. I gently wiped it and more popped out like squeezing a big whitehead. There is not much odor to it.
Probably about a dime sized amount in total came out.
Today his whole penis is still red and he is having quite a bit of discomfort. A small amount of discharge was present when I looked.

Should I be taking him in or should I just be waiting and seeing if it gets better?

The "cottage cheese" sounds like smegma which is normal. Smegma is a mixture of defoliated skin and skin oils. It just needs to be wiped away.